Last month’s spring statement confirmed one thing: Starmer’s Labour is the new party of cuts. Welcome to austerity 2.0. Labour ran their election campaign on the slogan of ‘change,’ but this is a continuation of 14 years of Tory policies. Real change now has to be won by the working class, in struggle.
Rachel Reeves pledged that under Labour, there would only be one major budget per year. This is supposedly to provide ‘stability’ for big business through planning around taxes. For the super-rich, it may appear she was true to her word: in the Spring Statement, big business went completely untouched. For workers, disabled and sick people who have been targeted, however, it is a different story.
Cutting Welfare — Not Once But Twice
Disabled and sick people are at the sharpest end of the cuts. Reeves announced more stringent PIP qualification thresholds, the halving and then freezing of incapacity payments for new claimants (which some of those who no longer qualify for PIP will be moved on to), cuts in the basic Universal Credit rate, and a complete ban on anyone under the age of 22 claiming incapacity benefit.
This was a double whammy of cuts targeting disabled and sick people within a week. A slave to the unelected Office for Budget Responsibility (OBR), when told the first round of welfare cuts would not save as much as she thought, Reeves came back for more. These even deeper welfare cuts were reportedly finalised on the morning of the statement itself.
The attacks on the working class didn’t stop there. On top of axing 30,000 workers across the National Health Service of England (NHSE) and the Department of Health and Social Care (DHSC), there will be 15% ‘efficiency’ savings in the administrative costs of government departments (read: redundancies) as well as a further 10,000 job cuts in the civil service. This is aping the ‘chainsaw’ approach of DOGE in the US, coordinated by Trump and Elon Musk. These attacks are being celebrated by the representatives of capital, with The Economist publishing an article titled “Britain at last takes aim at worklessness”.
They see this as an opportunity to use what Marx and Engels called the ‘reserve army of labour’ (unemployed workers), with an even more unliveable benefits system forcing people to accept jobs paid well below the going rate. This creates a downward pressure on wages, resulting in a race to the bottom, meaning that big business gets to keep more profit. The Financial Times goes one step further, and is already mooting out the idea that further cuts should come in the Autumn Budget.
Drive of Militarism
This has been driven in large part by Trump’s demand on Europe to increase military spending to 5% of GDP. But this demand became a lot less theoretical following the televised Oval Office bust up and its fall out — with Trump effectively pulling US support for Ukraine. Trump clearly sees China as the threat that the US needs to pivot towards. And of course, Starmer’s Labour has agreed to do as Trump commands with docile obedience.
The Spring Statement included an increase in military funding of £2.2bn. Just as it was following the 2008 crash, the working class is expected to pay for the crises of capitalism. This time it is being done in the name of war and destruction rather than bailing out the bankers and financial sector.
A big question which remained unanswered in the Spring Statement is where will all the people being thrown off disability benefits, or out of jobs in the NHS and civil service staff go? Reeves has said that “those who can work should”, but in the three months up to February 2025, there were 816,000 vacancies in Britain.
The Resolution Foundation estimates that under the new criteria for PIP, up to 1.2 million people will no longer be able to claim it. Many PIP claimants are already in work. In fact, the benefit is often what makes this possible by allowing people access to the necessary support to achieve this) Meanwhile almost one million young people are already outside of work or education. So there aren’t even enough jobs to go round, even if people were able to do them!
At the same time, the British economy relies on a low-paid, relatively low-skilled workforce. Even the new arms industry jobs that Starmer is trying to create will not solve the problems of low growth and increasing interest on government debt. Indeed, many economists are warning that Britain is facing a continued period of stagflation.
Some commentators have discussed the possibility of a new era of ‘military Keynesianism’ (spending money on arms production to grow the economy). But this is a false start. The UK arms industry’s trade association (ADS) estimates the UK currently has around 55,000 arms export jobs, with another 115,000 employed in the Ministry of Defence. Even if you include the latter, that is only 0.5% of the UK workforce.
While this percentage is likely set to increase amid a ramping up of militarism, the state’s overall spending is currently being decreased. It would only make sense to talk about any kind of ‘Keynesianism’ in the context of a massive increase in state spending — the opposite of what Labour is doing.
The only people who will prosper from increased spending on the military are the arms producers. BAE Systems stock price has increased 34% since 10 February alone (as of 26 March). In the same period, Leonardo UK’s stock price has risen 55%. These are industries that do not produce anything useful for the working class. To state the obvious, they literally just produce weapons that kill other working class people.
Welfare Not Warfare
Immediately after the initial austerity measures were announced, the campaign group Crips Against Cuts organised a series of protests, and Disabled People Against the Cuts (DPAC) called a protest on the day of the statement. These are welcome steps, but must only be the start of the fight back.
The workers’ movement must respond to these attacks robustly. The government has absolutely no mandate for these cuts. Labour were elected promising change. Working-class people must not be forced to once again pay for capitalist crises they didn’t create. Nor should we be forced to pay for a new ramping up of war and militarism.
As a first step towards building the fightback that is needed, Socialist Alternative has launched a petition calling on our trade union leaderships to name a date in May for a huge national anti-austerity demonstration. If built for properly, hundreds of thousands of trade unionists, community campaigners and young people could be mobilised to take part. We encourage all of our readers to sign and share the petition.
A trade union-led national demo could help kickstart the kind of movement needed, but it would only be the start. The strike wave of 2022–3 showed that when workers take collective action, they can make gains. Now we need to build towards coordinated strike action on an even bigger scale.
For civil service departments facing cuts and redundancies, the Public and Commercial Services Union (PCS) need to begin preparing the groundwork for battles against these, including strike action if necessary. Unfortunately, Fran Heathcote, the General Secretary of PCS has said she is willing to work with Labour to ‘remould’ the civil service. This should absolutely be opposed by the PCS membership. A movement from below of PCS workers can force the leadership into organising action against the cuts and redundancies.
New Left Party
There has been some limited opposition to the cuts imposed by Starmer within the Labour Party itself, and a number of councillors and members have quit the party. But no MP has yet openly resigned.
There are divisions within Labour. However it is clear that Starmer will push these cuts through regardless. His large parliamentary majority means even a significant rebellion would not necessarily stop him from winning parliamentary votes on cuts that require legislation, and he could even rely on Tory support to get them through.
It is welcome that Corbyn’s group of independent MPs put out a strong statement condemning the cuts. But working class people have no mass political party through which to organise right now. Meanwhile, British Trumpism in Reform UK is on the rise, with Farage cynically presenting himself as ‘anti — establishment.’ This can only be addressed by the building of a new political vehicle for working-class struggle.
Jeremy Corbyn and the anti-war independent MPs elected at last year’s General Election, as well as suspended left Labour MPs like Zarah Sultana and John McDonnell should come together to help launch a new left party of struggle, bringing together disability rights activists, trade unionists, anti-war activists and all those opposed to pro-cuts, pro-capitalist politics. This is the most important and necessary step for the working class right now in Britain.
We believe such a party should adopt a socialist programme. This means fighting for a different kind of society — one which is based on democratic public ownership over the key monopolies and economic levers. One which is founded on working-class solidarity and opposition to all forms of oppression. If you agree, join Socialist Alternative!
